NEW ORLEANS – Bill Gates’ fortune and the PC boom that built it, may be taking a beating, but Gates used a keynote to Microsoft Corp. hardware partners today to declare that the PC will remain a central and important technology.

Gates, who went on television defending Microsoft’s need to “innovate” after a federal judge ruled against the company, made no overt references to the Justice Department antitrust suit against the company, the published reports that the government and the states will ask the judge to break up Microsoft (www.microsoft.com), the reduced earnings expectations the company’s chief financial officer predicted, or the precipitous drop in stock value that saw MSFT close at $66.625 yesterday.

His only possible nod to the troubles during the Windows Hardware Engineering Conference (WinHEC) was a comment to Cisco Systems Inc. CEO John Chambers during a demonstration of Cisco’s IP phones and CallManager software running on Windows 2000. Speaking via phone from the West Coast, Chambers asked Gates if had been partying on New Orlean’s Bourbon Street. Gates laughed and said “not last night.”

The strain showed strongest when Microsoft employees were giving technology demonstrations and Gates was off stage. Through a screen, Gates could be seen rocking intently back and forth in a chair – the Microsoft chairman’s signature pose for serious thought.

One technology demonstrator, Chad Magendanz, program manager for Windows User Experience, made the only outright statement about the situation during a demonstration of Microsoft’s next version of Windows 2000, code-named “Whistler.”

Magendanz pulled up a personal screen, showing a browser with market results on it. “Yesterday I was checking some financial news, and there are some great buy opportunities out there right now,” he joked.

Gates called his keynote, “PC: The Best is Yet to Come.”

“It’s exciting to talk about the growth path of the PC in the future,” Gates said. He said Microsoft would push to reduce the complexity of computers.

In response to industry observers who say the PC is beginning a downward trajectory as handheld and mobile devices take off, Gates said: “We are on the verge of some exciting innovations that will make the PC an even more vital hub to the future of computing. We are entering an era in which the PC will become more central to our everyday lives.” – Scott Bekker